How to make 7 million in 7 years …

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What's 17 years between friends?

Warning: This image has absolutely NOTHING to do with the post other than:

(a) it came up when I searched for “17” on Google Images (I don’t even know why?!),

(b) it’s very funny/cool, and

(c) I have absolutely NO IDEA how a boat lands on a car

… or, what a seemingly naked guy in a yellow raincoat is even doing there!?

____________________

In a recent post, we gave Chad a ‘starter kit’ to becoming a millionaire; and as Money Monk said:

There’s always a slow way and a fast way.

For me, the fast way has always held more appeal …

… but, that doesn’t mean that you can’t combine the two, as Jeff points out:

By taking into account annual contributions, your compound annual growth rate can significantly drop. For instance, if Chad starts with $10,000, his compound annual growth rate is 65.52%. If Chad could also save and invest $10,000 of his salary a year, his compound annual growth rate drops to 52.52%.

If Chad’s Date is firm, annual contributions might not change his analysis much, but if he extended his term or could increase his annual contributions, (or both)…the difference can substantial. For example, if Chad extended his date out another 17 years (and adjusted his number for inflation), his compound annual growth rate drops to 19.81%. If Chad also decided to increase his initial annual contribution to $15,000 and then continue to increase the annual contributions by 5% a year, his compound annual growth rate drops further to 16.69%.

Getting 16.69% annualized return is no cake walk, but a lot easier to get than 65.52%.

What’s an extra 17 years and a drop in living expenses by $15k a year between friends?!

Seriously, Jeff’s point is absolutely valid and is the real secret:

Rather than gambling on the business or [insert speculation of choice: growth stocks and options; gold; oil; etc.; etc.] to pay off big time (i.e. deliver your Number in one neat check), you build a business for sale … in the meantime, you keep following Making Money 101 and save/invest in solid assets (e.g. income-producing real-estate and/or ‘value’ stocks) …

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